In her article NHS as State Failure: Lessons from the Reality of Nationalised Health Care, published in the December 2008 issue of Economic Affairs, Helen Evans, the Director of Nurses for Reform in the UK, describes the origins of Britain’s National Health Service (NHS), the consequences of its implementation and her proposals for reform.

Dystopian originsSir William Beveridge outlined his plans for the National Health Service (NHS) in a paper, Social Insurance and Allied Services, published in 1942. Just prior to the NHS launch date in July 1948 the government issued a leaflet promising British citizens that the NHS ‘will provide you with all medical, dental and nursing care. Everyone – rich or poor – can use it.’ According to Evans, ‘Today, more than half a century on, the NHS has never delivered upon its early promise.’

Persistent scarcityInitial estimates carried out in 1944 put the annual NHS cost to taxpayers at £132 million but in its first full year of operation the cost was £320 million. The early estimates ‘assumed that demand for healthcare would remain roughly constant at pre-NHS levels, despite there being no price constraints on demand’. New medical developments exacerbated the problem.

By 1950 the NHS was under pressure: there was a shortage of doctors and nurses, the demand for hospital services was not being met and no new hospitals were being built, nor were the clinics that had been promised as a solution to doctors’ problems. Doctors were given budgetary limits, which forced them to ration care. The result was that, ‘More than minimal care was denied to cases where there was little chance of successful recovery, particularly to young children or the elderly with serious conditions’. Health care delivery to everyone else was provided ‘sparingly by international standards’.

Queuing for healthcare in general practices and outpatient departments has become a recognised form of rationing of care by the NHS. Instead of the ‘free’ and unlimited supply of healthcare that was promised, what patients have had ‘is an unlimited access to a waiting list from which – with a few exceptions – they will not be excluded.’ Right of access is not the same as timely treatment, while it may be unlimited in the longer term it is limited when many patients need it most, “for the relief of pain or discomfort”.

Failure of nationalisationDespite repeated plans for the building of new hospitals, commencing in the 1950s, at the end of the twentieth century many of the NHS buildings pre-dated the First World War (1914-18). The NHS was a victim of various economic crises and the inevitable problems of political allocation of resources to nationalised industries and services that do not respond to consumer demand. In the end the state has since 1992 ‘finally sought private capital investment so as to remedy its manifest failings’.

Class obsessed, sexist and racist Quoting from A Class Act: The Myth of Britain’s Classless Society, written by Andrew Adonis and Stephen Pollard, Evans points out that although women represent a large percentage of NHS staff they account for only 28% of chief executives and senior managers. Adonis and Pollard wrote that: ‘Just as the classless society is itself a myth, so too is the comforting classless NHS.’ According to Evans there are also ‘almost no black or ethnic minority senior managers’.

Parlous care for allIn this system that has for 60 years promised so much there are ‘one million people on waiting lists and an estimated 200,000 people trying to get on to them’. People struggle to get appointments with NHS GP’s or to find an NHS dentist. Reports claim that there is a 10% chance of patients in NHS hospitals picking up infections, up to 60% of patients are undernourished during hospital stays, and aged patients are persistently discriminated against in the resources devoted to their care.

Dying for a failed idealThe litany of documented failures contained in the Helen Evans description of the NHS makes distressing reading. On its administration: restrictive practices, excessive rationing, low levels of capital investment and inequitable and inadequate results. On its performance, quoting Butler and Pirie: patients who wait 18 months for operations, patients put on trolleys in corridors when they arrive, more than a quarter given an illness they did not have when they arrived, healthy women unnecessarily subjected to operations, and organs confiscated from dead babies without asking for parents’ permission – if all these things were done by private hospitals it would ‘have been put down to the reckless pursuit of profits, or to putting shareholders ahead of patients’.

Using a measure known as ‘mortality amenable to health care’ a study by Matthew Sinclair used WHO data to compare NHS performance to that of Germany, France, the Netherlands and Spain. Sinclair reported that: ‘Thousands are dying every year thanks to Britain’s health service not delivering the standards people expect and receive in other European countries. Billions of pounds have been thrown at the NHS but the additional spending has made no discernible difference to the long-term pattern of falling mortality. This is a colossal waste of lives and money.’

Tiptoeing back to the market ‘In recent years’ Evans says, ‘under the general rubric of Public Private Partnerships, the British government has championed a whole raft of market-oriented reforms.’ These include sending NHS patients to independent hospitals and clinics for care; asking the private sector to design, build and operate a new generation of Independent Sector Treatment Centres for the benefit of NHS patients, and a plan to establish a new generation of independent Foundation hospitals free from government control with a greater say over how they develop and raise capital.

More and more British people are taking responsibility for their own health care; 7 million have private medical insurance; 6 million have private health cash plans; 8 million pay privately for complementary therapies, and each year more than 250,000 pay for their own acute surgery. ‘And many millions more pay privately towards long-term care.’ Seriously ill patients are now allowed to add their own money to the purchase of the most innovative medicines and treatments, an option that was previously disallowed.

Helen Evans is in favour of a range of reforms. They include: (i) NHS patients being able to choose to be treated at private hospitals and clinics (ii) The ultimate privatisation of all state hospitals with freedom from political control and interference, and (iii) Removal of restrictions on advertising that deprive patients of information about health care products and services, including those of doctors, hospitals and pharmaceutical companies.

Her conclusion: ‘Only by putting patients and consumers’ interests first will healthcare really improve. It is only when healthcare is opened up to real consumers, trusted brands and new funding mechanisms – such as private health savings accounts – that nurses and other health professionals will find themselves working in environments with the incentives, resources and freedom to deliver responsive, popular and high quality care.

As such, I reject egalitarianism and nationalisation in favour of healthy privatisation and competition. Ultimately, 20 years working in the NHS has taught me to believe in people and markets – not political diktat.’

Applicability to South AfricaHelen Evans has provided good reasons why SA, instead of following a failed NHS-type health care system, should build on the excellent health care resources we already have. And instead of stifling the private sector with excessive regulation, SA should allow it to innovate and grow so as to provide services to an increasing percentage of the total population, steadily reducing the excessive burden that now rests on the public sector.

Author: Eustace Davie, director of the Health Policy Unit and the Free Market Foundation. The review may be republished without prior consent but with acknowledgement to the author. The article NHS as State Failure: Lessons from the Reality of Nationalised Health Care by Helen Evans was published in Volume No 4 December 2008, Economic Affairs, the Journal of the Institute of Economic Affairs, London, published by Wiley-Blackwell.

Note: Readers interested in this subject are urged to read the original article, which can be found in the December issue of Economic Affairs obtainable from IEA Orders at sales@gazellebooks.co.uk